Specialist
Former head at Bundesliga International GmbH (DFL Deutsche Fußball Liga GmbH)
Agenda
- German football league structure and Bundesliga’s competitive position within European football leagues
- Regulatory considerations, corporate structure and revenue stream analysis across media rights, sponsorships, ticketing and others
- Distribution channels across linear and streaming, highlighting split between terrestrial TV and OTT (over-the-top)
Questions
1.
Can you outline the structure of German football leagues and tournaments and where Bundesliga sits within that? If German football leagues’ TAM were 100%, how much of that would Bundesliga 1 and Bundesliga 2 contribute?
2.
You mentioned the 1% payment fee. Is there any probability of this increasing or will it remain consistent? What are the governing rules around the mechanics determining this 1%?
3.
The split between Bundesliga 1 and 2 is 80/20. What is the viability of this increasing? Do you sense Bundesliga 2 can grow to become 70/30 or 60/40? What dynamics determine this split and will we see any evolution?
4.
Within European and English football leagues, can you outline the positioning of Bundesliga – primarily Bundesliga 1 – in terms of viewership, both in person and through linear television or streaming platforms? How does it compare to larger leagues such as LaLiga, Ligue de Football Professionnel or Serie A?
5.
You said the broadcasters don’t really share the data and information. What strategies does Bundesliga use to handle this lack of information? What data sourcing systems does the league utilise to effectively understand how well it’s performing commercially in terms of viewership?
6.
We’ve seen increased PE stake investments in commercial and broadcast rights recently in the overall sector, as well as credit issuances by leagues such as LaLiga. What is your initial take on PE’s investments and credit issuances across the board by these leagues?
7.
I read that most Bundesliga clubs have a specific profitability requirement in order to receive any amount of debt for transfers. Can you outline the Bundesliga clubs’ general health and how this compares to that of clubs in the Spanish league or English Premier League, which we have seen suffer financially? How does overall profitability compare?
8.
You mentioned the 50+1 ownership rule should be lightened somewhat to enable stake-building by PE, which will allow for funds. You also discussed Bayern Munich suffering. Beyond some of the Bundesliga’s major players or teams, which ones do you think are currently ripe for PE investment as a result of postpandemic recovery?
9.
You mentioned the Bundesliga’s licensing team and its strict professionalism has helped better financial performance vs LaLiga, Serie A and Ligue de Football Professionnel. What other major profitability drivers have allowed Bundesliga to perform better financially than the other European leagues?
10.
What’s the trade-off when looking at ticketing as a whole and the lower prices? How does Bundesliga consider the trade-off between audience engagement and building its audience viewership vs increasing ticket prices? Is there any opportunity to increase ticket prices or could that be detrimental to the overall
league? If it currently offers a ticket for about EUR 1, could it increase that to EUR 2-3?
11.
You mentioned that Bayern Munich has dominated for the last 10 years. I understand that, when it comes to audience engagement and viewership, it’s all about building the tension as well as having more of a level playing ground. Has Bundesliga done anything around structuring the matches or opponents to at least increase the competition against Bayern Munich? Or will Bayern just continue dominating unless another club – such as Borussia Dortmund – really improves its performance? How can the league level the playing field, if at all?
12.
I believe Bundesliga has attracted PE investments historically and there has been news over the years that the league was seeking investments, particularly for its international media rights, but this fell through because of the opposition. I think a 66% majority is required from the teams. Why do you think these previous international media rights stake investments fell through? Why were the teams opposed to this?
13.
I read that Bundesliga approached Saudi to try to get them to have a stake investment for the media, or the Saudi international rights. You also mentioned domestic PE funds looking at perhaps taking a stake in domestic media rights. In the current environment, where Bundesliga is looking to raise more PE investments, how do you think the deal or the investment opportunity needs to be structured? Will it have to be broken down on a per-country media rights basis? How should we think about investing in the media rights for Bundesliga domestically and internationally?
14.
Is this 50+1 ownership rule applicable to the Bundesliga league or is it only for the teams participating in the tournament? Should we consider any other regulatory concerns around stake-building for Bundesliga?
15.
You said it could be a potential concern for European leagues if a majority of the media rights were owned by one dominant PE fund. Could you elaborate on that?
16.
Bundesliga’s revenue growth saw an acceleration post-2015. What factors do you think led to this in terms of the overall revenue base? How might this evolve over the next three years, now that we’re seeing post-pandemic normalisation?
17.
I can see the correlation between the national team’s performance and Bundesliga’s growth, but can you unpack the political factors you mentioned in China and MENA? Have those issues mainly sorted themselves out or are they still an ongoing concern?
18.
There are challenges with selling media rights sales internationally, and you noted there was perhaps an excess amount paid. If PE comes in and begins building stakes on a per-country basis for the international media rights sales, how would it offset or hedge against the political issues, or any other issues that could lead to unsustainable inflated prices being paid?
19.
Could you outline the GPM [gross profit margin] or EBIT margin profile for Bundesliga and how these have trended? Are we seeing an increase in the margin profile vs pre-pandemic? Could there be any reversion to pre-pandemic margins?
20.
You discussed the clubs’ revenue streams. Could you break down the revenue streams of Bundesliga as a whole? How do you assess revenue contribution here?
21.
Sponsorship is quite a small revenue stream, and you said a majority of this is done on a team basis vs at a league level. What opportunities exist in building out this sponsorship revenue stream at a league level? Are they considerable? How could PE maximise that?
22.
How are the sponsorship teams structured in the Bundesliga? Is there a team handling it domestically and another internationally?
23.
We discussed sponsorship being a smaller revenue contributor and the potential to expand it further. How does this revenue stream compare for Bundesliga vs LaLiga? Does LaLiga approach it differently?
24.
Matchday revenues aren’t a considerable revenue stream for Bundesliga. Is there any opportunity for the league to increase the price from EUR 1 to EUR 2 and perhaps take EUR 0.50 as a portion of that? Can it get a portion of these ticketing fees and then give the rest to the clubs? Is that possible, or is it structured
in such a manner that all the revenue streams from matchday ticket sales have to go to the clubs?
25.
The audiovisual media rights are 90% of the revenue streams. Can you break down this 90% by geographic concentration, perhaps across the Americas, APAC, Europe and MENA? Who are the leading countries under these regions? How do the media rights split across China, Japan, Spain and so on?
26.
You mentioned Viaplay in Scandinavia and I know that’s very aggressive, but from what other major EU countries is the 60% revenue coming from?
27.
We discussed China, but what other opportunities or revenue streams come from regions such as Southeast Asia or countries such as Indonesia, where football is very popular? Are those being built out substantially?
28.
Would it make sense for PE to acquire the international rights distribution in APAC as a whole? Is there any viability for this beyond Japan and perhaps in India or Southeast Asia?
29.
You mentioned domestic rights valuations, and gave a range of about EUR 1.1bn-2bn. How is this broken down into linear and terrestrial television, and then further into free-to-air vs pay TV? How does that compare to what we’re seeing in the OTT [over-the-top] space? What does the domestic revenue
split look like across the forms of content consumption?
30.
How much of the 10% in OTT is going to Dazn vs others?
31.
What’s the structure of the team selling the rights domestically? How effective do you think that team is at increasing the rights’ value? Has it increased this substantially over time?
32.
What does the contract tendering process look like from a domestic perspective? How long does it take to renew? Is that 2-3 years? Is there any opportunity for Bundesliga to flex this to lock in cash flows?
33.
How is the international audiovisual rights team structured by geography, given Bundesliga sells or tries to sell its rights to so many regions?
34.
How should we look at the split between terrestrial – so linear and free-to-air – vs pay TV vs OTT at the international level, appreciating this will differ by country? We know players such as Dazn are international or trying to be, so how should we look at building out that split between terrestrial TV and OTT?
35.
You mentioned the de-linear or OTT structure is more attractive when looking at markets in Asia. How do you think PE should look at maximising contracts with OTT platforms to increase the rights valuations?
36.
I read about some interesting relationships and partnerships building out in Web3 or the NFT space, such as Bundesliga’s partnerships with Topps, Sorare and recently with OneFootball. Media reports suggest these could potentially add EUR 170m revenue. What are these opportunities and how is Bundesliga trying to build out fan engagement through the NFT space?
37.
We’ve discussed the structure of Bundesliga as a whole. When PE is looking at taking stake opportunities, what does it need to understand at the domestic and international levels to maximise the value of the deal and build out the league further? What should it bring to the table to make the investment attractive?
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